The International Monetary Fund (IMF) has added 11 more conditions to Pakistan’s $7 billion bailout programme, including parliamentary approval of the next federal budget in line with the fund’s agreement and changes to laws governing Special Economic Zones (SEZs) and Special Technology Zones (STZs).

Government sources told a private media outlet that the staff-level agreement reached between Pakistan and the IMF last month became possible after these additional conditions were included in the programme.

With the latest additions during the third review of the bailout package, the total number of IMF conditions imposed over the past two years has reached 75, covering economic policy, governance and private sector reforms.

The government has assured the IMF that Parliament will approve the fiscal year 2026-27 budget in line with the staff agreement under the $7 billion programme. This is the second time that budget approval has been tied to IMF conditions under the current arrangement, as the previous budget was also passed under similar commitments.

Reports quoted sources that Pakistan also assured the IMF it would present a fiscally consolidated budget and avoid setting a higher economic growth target for the next fiscal year. Finance Minister (FM) Muhammad Aurangzeb reportedly gave the assurance to the IMF’s deputy managing director during last week’s visit to Washington DC. 

Pakistan has also accepted a condition to amend the SEZ Act and the Special Technology Zones Authority (STZA) Act by June 2027. Under the agreement, the government will gradually phase out existing fiscal incentives and shift from profit-based incentives to cost-based incentives.

The amendments will also remove the powers of the Board of Approvals, Board of Investment and SEZ authorities to grant tax incentives. According to the commitment, all fiscal incentives for STZs will be completely phased out by 2035 to the satisfaction of the IMF.


The government has further agreed to stop Export Processing Zones from selling goods in the local market by September this year. Industries operating in these zones have often faced allegations of selling products domestically to avoid taxes.

The condition was accepted while the National Assembly Standing Committee on Finance was already reviewing amendments to the SEZ law last week.

Minister for Investment Qaiser Ahmed Sheikh told the committee that the government will lease 6,000 acres of land in Karachi to developers for SEZ development without charging any amount. He mentioned that each developer could receive up to 1,000 acres on lease, although lease terms had not yet been finalised.

The amended law also prevents courts from taking up commercial legal disputes related to these zones.

The government has also committed not to introduce new zones until negotiations on exceptions for new STZs in priority sectors are completed and the phase-out of current incentives by 2035 is finalised.

Out of the total $7 billion programme, the IMF has so far disbursed $3 billion. The fourth tranche of $1 billion is expected in the first week of May.

Under another new condition, the government will establish the Pakistan Regulatory Registry by June next year to improve the business climate. The registry will serve as a legal source of business regulations, starting with federal and Islamabad Capital Territory rules before expanding to provinces.

The IMF has also asked Pakistan to gradually ease foreign exchange restrictions. In response, the State Bank has committed to preparing a roadmap for the phased removal of these restrictions, including financial stability and structural requirements for each step.


The government has also accepted three additional conditions related to electricity and gas pricing.

It has committed to timely Quarterly Tariff Adjustments (QTAs) and monthly Fuel Charge Adjustments (FCAs), while fully implementing annual electricity price rebasing by January 2027 to reflect changes in global energy markets.

Pakistan has also agreed to notify semiannual gas tariff adjustments based on cost recovery, as determined by OGRA, starting from July 1, 2026, and February 15, 2027.

For the Federal Board of Revenue (FBR), the government has committed that by June this year, audit case selection will be centralised. The FBR will adopt a standardised audit manual, a published audit policy and a risk register to formalise audit procedures and follow-up of high-risk tax cases.

Another condition requires that the government to amend Public Procurement Regulatory Authority (PPRA) rules by September this year to remove state-owned enterprise preferences in public procurement contracts awarded without competition, subject to federal cabinet approval.

To offset the impact of higher taxes and energy prices under the IMF programme, the government has also agreed to increase Benazir Income Support Programme (BISP) payments from Rs14,500 to Rs19,500 starting January 2027.

The increase will account for projected inflation in 2026 and move quarterly benefits closer to 15 percent of the lowest-income family consumption basket.